What's Driving Treasury Yields? | Zero Hedge News

The 10Y Treasury yield has jumped nearly 130bp from its low point in early May. Given the tight ranges and low volatility of yields during the most of QE era, this kind of move in just over 3 months seemed stunning to some investors. Consequently, the question that has come up often recently is: what has been driving Treasury yields?

As UBS' Boris Rjavinski notes, several years ago a rate strategist would give you a straightforward and predictable answer: inflationary expectations, economic growth projections, and current and future monetary policy. The “monetary policy” part of the answer would likely simple deal with the path of the key short-term policy rate. Terms such as “quantitative easing”, “communication policy”, “thresholds and triggers” were foreign to bond investors during the era of pre-credit crisis innocence.

Read more...What's Driving Treasury Yields? | Zero Hedge News

Fed plan, fear push 10-year yield to record low, but corporate borrowing costs aren't falling | StarTribune.com

WASHINGTON - Interest rates on government debt plunged Thursday as investors bought Treasurys, seeking safety from the global stock selloff.

The Federal Reserve's bond-buying program announced a day earlier also boosted demand for Treasurys. There were hints, however, that the program was not having one of its intended effects — reducing borrowing costs for companies. One of the Fed's goals with the program is to encourage business investment by making it easier for them to borrow.

Instead, the Fed's own dim view of the economy increased fears about a new recession. That helped push the 10-year Treasury note's yield to a record low of 1.71 percent Thursday, and the 30-year bond's yield posted the steepest two-day drop since November 2008.

Treasury yields fall as demand for them increases. More buying means higher prices, which eat into traders' returns.

The Fed had hoped that super-low rates on the 10-year note would make Treasurys less attractive, causing traders to make higher-risk bets. Interest rates for loans such as mortgages track the 10-year yield. A lower interest rate might spur investment and spending. Both slowed as the economy weakened this year.

For most companies, analysts say, economic weakness and shaky stock markets are having more of an effect, causing their borrowing costs to increase.

"Everything is getting trashed except for Treasurys," said Kim Rupert, managing director at Action Economics LLC. "If you have recession fears — even Depression fears, in Europe — that's not a good environment for most corporate credit," she said.

The reason: The fear that's driving traders into Treasurys makes companies look like riskier bets. And on a day like Thursday, traders are trying to reduce their financial risk.

In credit markets other than government debt, there was little evidence Thursday that borrowing costs are coming down.

Two funds representing baskets of high-yield corporate bonds lost 1.5 percent on Thursday. That means borrowing costs for those companies increased sharply. A fund representing very safe bonds edged up only 0.3 percent — a much smaller gain than Treasurys showed.

The market's economic worries more than offset any benefit from the Fed's action, said Chad Morganlander, a portfolio manager with Stifel, Nicolaus & Co.

"The behavior of interest rates won't assist the economy as (stock) markets, in particular, go down," he said.

Shares plunged in Asia and Europe as traders digested the Fed's bleak economic outlook. Markets in Germany, France and London all closed down about 5 percent. U.S. stocks followed them lower, with the Dow losing 3.5 percent.

Borrowing costs for companies have increased in the past three months, Morganlander said. He said those higher borrowing costs are a strong early indicator of possible recession. His group estimated two months ago that the economy has a 50-50 chance of returning to recession.

Higher borrowing costs make businesses reluctant to invest. A key indicator of business investment plans fell steeply in July, the most recent month for which data is available.

Meanwhile, the yield on the 30-year Treasury bond dropped sharply. Traders were surprised by the Fed's plan to invest heavily in this area, because the 30-year yield has limited effect on borrowing rates in the rest of the economy.

At 4:10 p.m. Eastern time, the yield on the 10-year Treasury note was 1.73 percent, down from 1.86 percent late Wednesday. Its price rose $1.16 for every $100 invested.

The 30-year yield fell to 2.80 percent from 2.99 percent late Wednesday. That's the lowest since January 2009, not long after the scariest part of the financial crisis. Its price rose $4.25 for every $100 invested.

The yield on the two-year Treasury was flat at 0.2 percent. The yield on the six-month Treasury bill fell to 0.02 percent from 0.03 percent late Wednesday. Its discount wasn't available.

by Daniel Wagner Associated Press September 22, 2011 - 4:02 PM


Fed plan, fear push 10-year yield to record low, but corporate borrowing costs aren't falling | StarTribune.com

Fed plan, fear push 10-year yield to record low, but corporate borrowing costs aren't falling | StarTribune.com

WASHINGTON - Interest rates on government debt plunged Thursday as investors bought Treasurys, seeking safety from the global stock selloff.

The Federal Reserve's bond-buying program announced a day earlier also boosted demand for Treasurys. There were hints, however, that the program was not having one of its intended effects — reducing borrowing costs for companies. One of the Fed's goals with the program is to encourage business investment by making it easier for them to borrow.

Instead, the Fed's own dim view of the economy increased fears about a new recession. That helped push the 10-year Treasury note's yield to a record low of 1.71 percent Thursday, and the 30-year bond's yield posted the steepest two-day drop since November 2008.

Treasury yields fall as demand for them increases. More buying means higher prices, which eat into traders' returns.

The Fed had hoped that super-low rates on the 10-year note would make Treasurys less attractive, causing traders to make higher-risk bets. Interest rates for loans such as mortgages track the 10-year yield. A lower interest rate might spur investment and spending. Both slowed as the economy weakened this year.

For most companies, analysts say, economic weakness and shaky stock markets are having more of an effect, causing their borrowing costs to increase.

"Everything is getting trashed except for Treasurys," said Kim Rupert, managing director at Action Economics LLC. "If you have recession fears — even Depression fears, in Europe — that's not a good environment for most corporate credit," she said.

The reason: The fear that's driving traders into Treasurys makes companies look like riskier bets. And on a day like Thursday, traders are trying to reduce their financial risk.

In credit markets other than government debt, there was little evidence Thursday that borrowing costs are coming down.

Two funds representing baskets of high-yield corporate bonds lost 1.5 percent on Thursday. That means borrowing costs for those companies increased sharply. A fund representing very safe bonds edged up only 0.3 percent — a much smaller gain than Treasurys showed.

The market's economic worries more than offset any benefit from the Fed's action, said Chad Morganlander, a portfolio manager with Stifel, Nicolaus & Co.

"The behavior of interest rates won't assist the economy as (stock) markets, in particular, go down," he said.

Shares plunged in Asia and Europe as traders digested the Fed's bleak economic outlook. Markets in Germany, France and London all closed down about 5 percent. U.S. stocks followed them lower, with the Dow losing 3.5 percent.

Borrowing costs for companies have increased in the past three months, Morganlander said. He said those higher borrowing costs are a strong early indicator of possible recession. His group estimated two months ago that the economy has a 50-50 chance of returning to recession.

Higher borrowing costs make businesses reluctant to invest. A key indicator of business investment plans fell steeply in July, the most recent month for which data is available.

Meanwhile, the yield on the 30-year Treasury bond dropped sharply. Traders were surprised by the Fed's plan to invest heavily in this area, because the 30-year yield has limited effect on borrowing rates in the rest of the economy.

At 4:10 p.m. Eastern time, the yield on the 10-year Treasury note was 1.73 percent, down from 1.86 percent late Wednesday. Its price rose $1.16 for every $100 invested.

The 30-year yield fell to 2.80 percent from 2.99 percent late Wednesday. That's the lowest since January 2009, not long after the scariest part of the financial crisis. Its price rose $4.25 for every $100 invested.

The yield on the two-year Treasury was flat at 0.2 percent. The yield on the six-month Treasury bill fell to 0.02 percent from 0.03 percent late Wednesday. Its discount wasn't available.

by Daniel Wagner Associated Press September 22, 2011 - 4:02 PM


Fed plan, fear push 10-year yield to record low, but corporate borrowing costs aren't falling | StarTribune.com

Fed plan, fear push 10-year yield to record low, but corporate borrowing costs aren't falling | StarTribune.com

WASHINGTON - Interest rates on government debt plunged Thursday as investors bought Treasurys, seeking safety from the global stock selloff.

The Federal Reserve's bond-buying program announced a day earlier also boosted demand for Treasurys. There were hints, however, that the program was not having one of its intended effects — reducing borrowing costs for companies. One of the Fed's goals with the program is to encourage business investment by making it easier for them to borrow.

Instead, the Fed's own dim view of the economy increased fears about a new recession. That helped push the 10-year Treasury note's yield to a record low of 1.71 percent Thursday, and the 30-year bond's yield posted the steepest two-day drop since November 2008.

Treasury yields fall as demand for them increases. More buying means higher prices, which eat into traders' returns.

The Fed had hoped that super-low rates on the 10-year note would make Treasurys less attractive, causing traders to make higher-risk bets. Interest rates for loans such as mortgages track the 10-year yield. A lower interest rate might spur investment and spending. Both slowed as the economy weakened this year.

For most companies, analysts say, economic weakness and shaky stock markets are having more of an effect, causing their borrowing costs to increase.

"Everything is getting trashed except for Treasurys," said Kim Rupert, managing director at Action Economics LLC. "If you have recession fears — even Depression fears, in Europe — that's not a good environment for most corporate credit," she said.

The reason: The fear that's driving traders into Treasurys makes companies look like riskier bets. And on a day like Thursday, traders are trying to reduce their financial risk.

In credit markets other than government debt, there was little evidence Thursday that borrowing costs are coming down.

Two funds representing baskets of high-yield corporate bonds lost 1.5 percent on Thursday. That means borrowing costs for those companies increased sharply. A fund representing very safe bonds edged up only 0.3 percent — a much smaller gain than Treasurys showed.

The market's economic worries more than offset any benefit from the Fed's action, said Chad Morganlander, a portfolio manager with Stifel, Nicolaus & Co.

"The behavior of interest rates won't assist the economy as (stock) markets, in particular, go down," he said.

Shares plunged in Asia and Europe as traders digested the Fed's bleak economic outlook. Markets in Germany, France and London all closed down about 5 percent. U.S. stocks followed them lower, with the Dow losing 3.5 percent.

Borrowing costs for companies have increased in the past three months, Morganlander said. He said those higher borrowing costs are a strong early indicator of possible recession. His group estimated two months ago that the economy has a 50-50 chance of returning to recession.

Higher borrowing costs make businesses reluctant to invest. A key indicator of business investment plans fell steeply in July, the most recent month for which data is available.

Meanwhile, the yield on the 30-year Treasury bond dropped sharply. Traders were surprised by the Fed's plan to invest heavily in this area, because the 30-year yield has limited effect on borrowing rates in the rest of the economy.

At 4:10 p.m. Eastern time, the yield on the 10-year Treasury note was 1.73 percent, down from 1.86 percent late Wednesday. Its price rose $1.16 for every $100 invested.

The 30-year yield fell to 2.80 percent from 2.99 percent late Wednesday. That's the lowest since January 2009, not long after the scariest part of the financial crisis. Its price rose $4.25 for every $100 invested.

The yield on the two-year Treasury was flat at 0.2 percent. The yield on the six-month Treasury bill fell to 0.02 percent from 0.03 percent late Wednesday. Its discount wasn't available.

by Daniel Wagner Associated Press September 22, 2011 - 4:02 PM


Fed plan, fear push 10-year yield to record low, but corporate borrowing costs aren't falling | StarTribune.com

Fed plan, fear push 10-year yield to record low, but corporate borrowing costs aren't falling | StarTribune.com

WASHINGTON - Interest rates on government debt plunged Thursday as investors bought Treasurys, seeking safety from the global stock selloff.

The Federal Reserve's bond-buying program announced a day earlier also boosted demand for Treasurys. There were hints, however, that the program was not having one of its intended effects — reducing borrowing costs for companies. One of the Fed's goals with the program is to encourage business investment by making it easier for them to borrow.

Instead, the Fed's own dim view of the economy increased fears about a new recession. That helped push the 10-year Treasury note's yield to a record low of 1.71 percent Thursday, and the 30-year bond's yield posted the steepest two-day drop since November 2008.

Treasury yields fall as demand for them increases. More buying means higher prices, which eat into traders' returns.

The Fed had hoped that super-low rates on the 10-year note would make Treasurys less attractive, causing traders to make higher-risk bets. Interest rates for loans such as mortgages track the 10-year yield. A lower interest rate might spur investment and spending. Both slowed as the economy weakened this year.

For most companies, analysts say, economic weakness and shaky stock markets are having more of an effect, causing their borrowing costs to increase.

"Everything is getting trashed except for Treasurys," said Kim Rupert, managing director at Action Economics LLC. "If you have recession fears — even Depression fears, in Europe — that's not a good environment for most corporate credit," she said.

The reason: The fear that's driving traders into Treasurys makes companies look like riskier bets. And on a day like Thursday, traders are trying to reduce their financial risk.

In credit markets other than government debt, there was little evidence Thursday that borrowing costs are coming down.

Two funds representing baskets of high-yield corporate bonds lost 1.5 percent on Thursday. That means borrowing costs for those companies increased sharply. A fund representing very safe bonds edged up only 0.3 percent — a much smaller gain than Treasurys showed.

The market's economic worries more than offset any benefit from the Fed's action, said Chad Morganlander, a portfolio manager with Stifel, Nicolaus & Co.

"The behavior of interest rates won't assist the economy as (stock) markets, in particular, go down," he said.

Shares plunged in Asia and Europe as traders digested the Fed's bleak economic outlook. Markets in Germany, France and London all closed down about 5 percent. U.S. stocks followed them lower, with the Dow losing 3.5 percent.

Borrowing costs for companies have increased in the past three months, Morganlander said. He said those higher borrowing costs are a strong early indicator of possible recession. His group estimated two months ago that the economy has a 50-50 chance of returning to recession.

Higher borrowing costs make businesses reluctant to invest. A key indicator of business investment plans fell steeply in July, the most recent month for which data is available.

Meanwhile, the yield on the 30-year Treasury bond dropped sharply. Traders were surprised by the Fed's plan to invest heavily in this area, because the 30-year yield has limited effect on borrowing rates in the rest of the economy.

At 4:10 p.m. Eastern time, the yield on the 10-year Treasury note was 1.73 percent, down from 1.86 percent late Wednesday. Its price rose $1.16 for every $100 invested.

The 30-year yield fell to 2.80 percent from 2.99 percent late Wednesday. That's the lowest since January 2009, not long after the scariest part of the financial crisis. Its price rose $4.25 for every $100 invested.

The yield on the two-year Treasury was flat at 0.2 percent. The yield on the six-month Treasury bill fell to 0.02 percent from 0.03 percent late Wednesday. Its discount wasn't available.

by Daniel Wagner Associated Press September 22, 2011 - 4:02 PM


Fed plan, fear push 10-year yield to record low, but corporate borrowing costs aren't falling | StarTribune.com

Fed plan, fear push 10-year yield to record low, but corporate borrowing costs aren't falling | StarTribune.com

WASHINGTON - Interest rates on government debt plunged Thursday as investors bought Treasurys, seeking safety from the global stock selloff.

The Federal Reserve's bond-buying program announced a day earlier also boosted demand for Treasurys. There were hints, however, that the program was not having one of its intended effects — reducing borrowing costs for companies. One of the Fed's goals with the program is to encourage business investment by making it easier for them to borrow.

Instead, the Fed's own dim view of the economy increased fears about a new recession. That helped push the 10-year Treasury note's yield to a record low of 1.71 percent Thursday, and the 30-year bond's yield posted the steepest two-day drop since November 2008.

Treasury yields fall as demand for them increases. More buying means higher prices, which eat into traders' returns.

The Fed had hoped that super-low rates on the 10-year note would make Treasurys less attractive, causing traders to make higher-risk bets. Interest rates for loans such as mortgages track the 10-year yield. A lower interest rate might spur investment and spending. Both slowed as the economy weakened this year.

For most companies, analysts say, economic weakness and shaky stock markets are having more of an effect, causing their borrowing costs to increase.

"Everything is getting trashed except for Treasurys," said Kim Rupert, managing director at Action Economics LLC. "If you have recession fears — even Depression fears, in Europe — that's not a good environment for most corporate credit," she said.

The reason: The fear that's driving traders into Treasurys makes companies look like riskier bets. And on a day like Thursday, traders are trying to reduce their financial risk.

In credit markets other than government debt, there was little evidence Thursday that borrowing costs are coming down.

Two funds representing baskets of high-yield corporate bonds lost 1.5 percent on Thursday. That means borrowing costs for those companies increased sharply. A fund representing very safe bonds edged up only 0.3 percent — a much smaller gain than Treasurys showed.

The market's economic worries more than offset any benefit from the Fed's action, said Chad Morganlander, a portfolio manager with Stifel, Nicolaus & Co.

"The behavior of interest rates won't assist the economy as (stock) markets, in particular, go down," he said.

Shares plunged in Asia and Europe as traders digested the Fed's bleak economic outlook. Markets in Germany, France and London all closed down about 5 percent. U.S. stocks followed them lower, with the Dow losing 3.5 percent.

Borrowing costs for companies have increased in the past three months, Morganlander said. He said those higher borrowing costs are a strong early indicator of possible recession. His group estimated two months ago that the economy has a 50-50 chance of returning to recession.

Higher borrowing costs make businesses reluctant to invest. A key indicator of business investment plans fell steeply in July, the most recent month for which data is available.

Meanwhile, the yield on the 30-year Treasury bond dropped sharply. Traders were surprised by the Fed's plan to invest heavily in this area, because the 30-year yield has limited effect on borrowing rates in the rest of the economy.

At 4:10 p.m. Eastern time, the yield on the 10-year Treasury note was 1.73 percent, down from 1.86 percent late Wednesday. Its price rose $1.16 for every $100 invested.

The 30-year yield fell to 2.80 percent from 2.99 percent late Wednesday. That's the lowest since January 2009, not long after the scariest part of the financial crisis. Its price rose $4.25 for every $100 invested.

The yield on the two-year Treasury was flat at 0.2 percent. The yield on the six-month Treasury bill fell to 0.02 percent from 0.03 percent late Wednesday. Its discount wasn't available.

by Daniel Wagner Associated Press September 22, 2011 - 4:02 PM


Fed plan, fear push 10-year yield to record low, but corporate borrowing costs aren't falling | StarTribune.com

Fed plan, fear push 10-year yield to record low, but corporate borrowing costs aren't falling | StarTribune.com

WASHINGTON - Interest rates on government debt plunged Thursday as investors bought Treasurys, seeking safety from the global stock selloff.

The Federal Reserve's bond-buying program announced a day earlier also boosted demand for Treasurys. There were hints, however, that the program was not having one of its intended effects — reducing borrowing costs for companies. One of the Fed's goals with the program is to encourage business investment by making it easier for them to borrow.

Instead, the Fed's own dim view of the economy increased fears about a new recession. That helped push the 10-year Treasury note's yield to a record low of 1.71 percent Thursday, and the 30-year bond's yield posted the steepest two-day drop since November 2008.

Treasury yields fall as demand for them increases. More buying means higher prices, which eat into traders' returns.

The Fed had hoped that super-low rates on the 10-year note would make Treasurys less attractive, causing traders to make higher-risk bets. Interest rates for loans such as mortgages track the 10-year yield. A lower interest rate might spur investment and spending. Both slowed as the economy weakened this year.

For most companies, analysts say, economic weakness and shaky stock markets are having more of an effect, causing their borrowing costs to increase.

"Everything is getting trashed except for Treasurys," said Kim Rupert, managing director at Action Economics LLC. "If you have recession fears — even Depression fears, in Europe — that's not a good environment for most corporate credit," she said.

The reason: The fear that's driving traders into Treasurys makes companies look like riskier bets. And on a day like Thursday, traders are trying to reduce their financial risk.

In credit markets other than government debt, there was little evidence Thursday that borrowing costs are coming down.

Two funds representing baskets of high-yield corporate bonds lost 1.5 percent on Thursday. That means borrowing costs for those companies increased sharply. A fund representing very safe bonds edged up only 0.3 percent — a much smaller gain than Treasurys showed.

The market's economic worries more than offset any benefit from the Fed's action, said Chad Morganlander, a portfolio manager with Stifel, Nicolaus & Co.

"The behavior of interest rates won't assist the economy as (stock) markets, in particular, go down," he said.

Shares plunged in Asia and Europe as traders digested the Fed's bleak economic outlook. Markets in Germany, France and London all closed down about 5 percent. U.S. stocks followed them lower, with the Dow losing 3.5 percent.

Borrowing costs for companies have increased in the past three months, Morganlander said. He said those higher borrowing costs are a strong early indicator of possible recession. His group estimated two months ago that the economy has a 50-50 chance of returning to recession.

Higher borrowing costs make businesses reluctant to invest. A key indicator of business investment plans fell steeply in July, the most recent month for which data is available.

Meanwhile, the yield on the 30-year Treasury bond dropped sharply. Traders were surprised by the Fed's plan to invest heavily in this area, because the 30-year yield has limited effect on borrowing rates in the rest of the economy.

At 4:10 p.m. Eastern time, the yield on the 10-year Treasury note was 1.73 percent, down from 1.86 percent late Wednesday. Its price rose $1.16 for every $100 invested.

The 30-year yield fell to 2.80 percent from 2.99 percent late Wednesday. That's the lowest since January 2009, not long after the scariest part of the financial crisis. Its price rose $4.25 for every $100 invested.

The yield on the two-year Treasury was flat at 0.2 percent. The yield on the six-month Treasury bill fell to 0.02 percent from 0.03 percent late Wednesday. Its discount wasn't available.

by Daniel Wagner Associated Press September 22, 2011 - 4:02 PM


Fed plan, fear push 10-year yield to record low, but corporate borrowing costs aren't falling | StarTribune.com

Fed plan, fear push 10-year yield to record low, but corporate borrowing costs aren't falling | StarTribune.com

WASHINGTON - Interest rates on government debt plunged Thursday as investors bought Treasurys, seeking safety from the global stock selloff.

The Federal Reserve's bond-buying program announced a day earlier also boosted demand for Treasurys. There were hints, however, that the program was not having one of its intended effects — reducing borrowing costs for companies. One of the Fed's goals with the program is to encourage business investment by making it easier for them to borrow.

Instead, the Fed's own dim view of the economy increased fears about a new recession. That helped push the 10-year Treasury note's yield to a record low of 1.71 percent Thursday, and the 30-year bond's yield posted the steepest two-day drop since November 2008.

Treasury yields fall as demand for them increases. More buying means higher prices, which eat into traders' returns.

The Fed had hoped that super-low rates on the 10-year note would make Treasurys less attractive, causing traders to make higher-risk bets. Interest rates for loans such as mortgages track the 10-year yield. A lower interest rate might spur investment and spending. Both slowed as the economy weakened this year.

For most companies, analysts say, economic weakness and shaky stock markets are having more of an effect, causing their borrowing costs to increase.

"Everything is getting trashed except for Treasurys," said Kim Rupert, managing director at Action Economics LLC. "If you have recession fears — even Depression fears, in Europe — that's not a good environment for most corporate credit," she said.

The reason: The fear that's driving traders into Treasurys makes companies look like riskier bets. And on a day like Thursday, traders are trying to reduce their financial risk.

In credit markets other than government debt, there was little evidence Thursday that borrowing costs are coming down.

Two funds representing baskets of high-yield corporate bonds lost 1.5 percent on Thursday. That means borrowing costs for those companies increased sharply. A fund representing very safe bonds edged up only 0.3 percent — a much smaller gain than Treasurys showed.

The market's economic worries more than offset any benefit from the Fed's action, said Chad Morganlander, a portfolio manager with Stifel, Nicolaus & Co.

"The behavior of interest rates won't assist the economy as (stock) markets, in particular, go down," he said.

Shares plunged in Asia and Europe as traders digested the Fed's bleak economic outlook. Markets in Germany, France and London all closed down about 5 percent. U.S. stocks followed them lower, with the Dow losing 3.5 percent.

Borrowing costs for companies have increased in the past three months, Morganlander said. He said those higher borrowing costs are a strong early indicator of possible recession. His group estimated two months ago that the economy has a 50-50 chance of returning to recession.

Higher borrowing costs make businesses reluctant to invest. A key indicator of business investment plans fell steeply in July, the most recent month for which data is available.

Meanwhile, the yield on the 30-year Treasury bond dropped sharply. Traders were surprised by the Fed's plan to invest heavily in this area, because the 30-year yield has limited effect on borrowing rates in the rest of the economy.

At 4:10 p.m. Eastern time, the yield on the 10-year Treasury note was 1.73 percent, down from 1.86 percent late Wednesday. Its price rose $1.16 for every $100 invested.

The 30-year yield fell to 2.80 percent from 2.99 percent late Wednesday. That's the lowest since January 2009, not long after the scariest part of the financial crisis. Its price rose $4.25 for every $100 invested.

The yield on the two-year Treasury was flat at 0.2 percent. The yield on the six-month Treasury bill fell to 0.02 percent from 0.03 percent late Wednesday. Its discount wasn't available.

by Daniel Wagner Associated Press September 22, 2011 - 4:02 PM


Fed plan, fear push 10-year yield to record low, but corporate borrowing costs aren't falling | StarTribune.com

Get the lowdown on government notes, bonds

U.S. Treasury notes, bonds and savings bonds have a well-established record as a long-term investment. Several websites offer good primers on government bonds. Here is a sampling of sites:

- Bankrate.com: Serves up insights about U.S. Treasury bills, Treasury Inflation-Protected Securities and U.S. savings bonds.

www.bankrate.com/brm/green/sav/svgs1e.asp.

- Bonds Online: Explains the government's TreasuryDirect bond purchase program.

www.bondsonline.com/asp/treas/direct.asp.

- InvestorGuide.com: Offers snapshot of U.S. government bonds.

investorguide.com/igu-article-576-treasury-bonds.html.

- Investopedia: Provides good overview of government bonds.

investopedia.com/university/bonds/bonds4.asp

McClatchy-Tribune News Service Apr. 24, 2011 12:00 AM




Get the lowdown on government notes, bonds

Get the lowdown on government notes, bonds

U.S. Treasury notes, bonds and savings bonds have a well-established record as a long-term investment. Several websites offer good primers on government bonds. Here is a sampling of sites:

- Bankrate.com: Serves up insights about U.S. Treasury bills, Treasury Inflation-Protected Securities and U.S. savings bonds.

www.bankrate.com/brm/green/sav/svgs1e.asp.

- Bonds Online: Explains the government's TreasuryDirect bond purchase program.

www.bondsonline.com/asp/treas/direct.asp.

- InvestorGuide.com: Offers snapshot of U.S. government bonds.

investorguide.com/igu-article-576-treasury-bonds.html.

- Investopedia: Provides good overview of government bonds.

investopedia.com/university/bonds/bonds4.asp

McClatchy-Tribune News Service Apr. 24, 2011 12:00 AM




Get the lowdown on government notes, bonds

Get the lowdown on government notes, bonds

U.S. Treasury notes, bonds and savings bonds have a well-established record as a long-term investment. Several websites offer good primers on government bonds. Here is a sampling of sites:

- Bankrate.com: Serves up insights about U.S. Treasury bills, Treasury Inflation-Protected Securities and U.S. savings bonds.

www.bankrate.com/brm/green/sav/svgs1e.asp.

- Bonds Online: Explains the government's TreasuryDirect bond purchase program.

www.bondsonline.com/asp/treas/direct.asp.

- InvestorGuide.com: Offers snapshot of U.S. government bonds.

investorguide.com/igu-article-576-treasury-bonds.html.

- Investopedia: Provides good overview of government bonds.

investopedia.com/university/bonds/bonds4.asp

McClatchy-Tribune News Service Apr. 24, 2011 12:00 AM




Get the lowdown on government notes, bonds

Get the lowdown on government notes, bonds

U.S. Treasury notes, bonds and savings bonds have a well-established record as a long-term investment. Several websites offer good primers on government bonds. Here is a sampling of sites:

- Bankrate.com: Serves up insights about U.S. Treasury bills, Treasury Inflation-Protected Securities and U.S. savings bonds.

www.bankrate.com/brm/green/sav/svgs1e.asp.

- Bonds Online: Explains the government's TreasuryDirect bond purchase program.

www.bondsonline.com/asp/treas/direct.asp.

- InvestorGuide.com: Offers snapshot of U.S. government bonds.

investorguide.com/igu-article-576-treasury-bonds.html.

- Investopedia: Provides good overview of government bonds.

investopedia.com/university/bonds/bonds4.asp

McClatchy-Tribune News Service Apr. 24, 2011 12:00 AM




Get the lowdown on government notes, bonds

Get the lowdown on government notes, bonds

U.S. Treasury notes, bonds and savings bonds have a well-established record as a long-term investment. Several websites offer good primers on government bonds. Here is a sampling of sites:

- Bankrate.com: Serves up insights about U.S. Treasury bills, Treasury Inflation-Protected Securities and U.S. savings bonds.

www.bankrate.com/brm/green/sav/svgs1e.asp.

- Bonds Online: Explains the government's TreasuryDirect bond purchase program.

www.bondsonline.com/asp/treas/direct.asp.

- InvestorGuide.com: Offers snapshot of U.S. government bonds.

investorguide.com/igu-article-576-treasury-bonds.html.

- Investopedia: Provides good overview of government bonds.

investopedia.com/university/bonds/bonds4.asp

McClatchy-Tribune News Service Apr. 24, 2011 12:00 AM




Get the lowdown on government notes, bonds

Get the lowdown on government notes, bonds

U.S. Treasury notes, bonds and savings bonds have a well-established record as a long-term investment. Several websites offer good primers on government bonds. Here is a sampling of sites:

- Bankrate.com: Serves up insights about U.S. Treasury bills, Treasury Inflation-Protected Securities and U.S. savings bonds.

www.bankrate.com/brm/green/sav/svgs1e.asp.

- Bonds Online: Explains the government's TreasuryDirect bond purchase program.

www.bondsonline.com/asp/treas/direct.asp.

- InvestorGuide.com: Offers snapshot of U.S. government bonds.

investorguide.com/igu-article-576-treasury-bonds.html.

- Investopedia: Provides good overview of government bonds.

investopedia.com/university/bonds/bonds4.asp

McClatchy-Tribune News Service Apr. 24, 2011 12:00 AM




Get the lowdown on government notes, bonds

Get the lowdown on government notes, bonds

U.S. Treasury notes, bonds and savings bonds have a well-established record as a long-term investment. Several websites offer good primers on government bonds. Here is a sampling of sites:

- Bankrate.com: Serves up insights about U.S. Treasury bills, Treasury Inflation-Protected Securities and U.S. savings bonds.

www.bankrate.com/brm/green/sav/svgs1e.asp.

- Bonds Online: Explains the government's TreasuryDirect bond purchase program.

www.bondsonline.com/asp/treas/direct.asp.

- InvestorGuide.com: Offers snapshot of U.S. government bonds.

investorguide.com/igu-article-576-treasury-bonds.html.

- Investopedia: Provides good overview of government bonds.

investopedia.com/university/bonds/bonds4.asp

McClatchy-Tribune News Service Apr. 24, 2011 12:00 AM




Get the lowdown on government notes, bonds

Gross: Why Pimco Dumped Treasurys From Biggest Fund - CNBC

The world's largest bond fund has moved out almost entirely from US debt and into that of emerging markets and corporations, Pimco's Bill Gross told CNBC.

Getty Images

Speaking a day after news broke that Pacific Investment Management Company had dumped its Treasurys holdings from its $236.9 billion Total Return fund, the Newport Beach, Calif.-based firm's managing director said it would return once yields grew more attractive.

"It's not a question of dissing the United States or questioning the credit of the United States, but simply a maturity reflection," Gross said. Treasurys are "mispriced relative to the inflationary environment and the growth we see ahead and there are better alternatives in order to capture yield."

Gross primarily based his evaluation on the reduction in yields caused by the Federal Reserve's buying of close to $2 trillion in Treasurys, with more slated before the second leg of the program—often called QE 2—comes to an end.

"When a trillion and a half dollars worth of annualized purchasing power disappears I simply question as to who will buy them and at what yield," he said. "We're suggesting at these yields it might be problematic."

Instead, the firm has moved its money to other debt until the rate structure changes.

"Those would be corporate bonds, those would be a smattering of high yield bonds and a growing proportion of emerging market debt which yields in the 5 to 6 percent category," he said. "Are these bonds as safe as Treasurys? No, they are not triple-A types of investments but they're not overvalued based on quantitative easing procedures that we've seen over the past 12 months.

"So we've moved into Brazil and Mexico and moved money, yes, at the margin into Spain, which has a better balance sheet than the United States."

He said the Total Return fund has returned about 5 percent, whereas a Treasurys portfolio would yield about 2 percent.

by Jeff Cox CNBC.com March 10, 2011

Gross: Why Pimco Dumped Treasurys From Biggest Fund - CNBC

Gross: Why Pimco Dumped Treasurys From Biggest Fund - CNBC

The world's largest bond fund has moved out almost entirely from US debt and into that of emerging markets and corporations, Pimco's Bill Gross told CNBC.

Getty Images

Speaking a day after news broke that Pacific Investment Management Company had dumped its Treasurys holdings from its $236.9 billion Total Return fund, the Newport Beach, Calif.-based firm's managing director said it would return once yields grew more attractive.

"It's not a question of dissing the United States or questioning the credit of the United States, but simply a maturity reflection," Gross said. Treasurys are "mispriced relative to the inflationary environment and the growth we see ahead and there are better alternatives in order to capture yield."

Gross primarily based his evaluation on the reduction in yields caused by the Federal Reserve's buying of close to $2 trillion in Treasurys, with more slated before the second leg of the program—often called QE 2—comes to an end.

"When a trillion and a half dollars worth of annualized purchasing power disappears I simply question as to who will buy them and at what yield," he said. "We're suggesting at these yields it might be problematic."

Instead, the firm has moved its money to other debt until the rate structure changes.

"Those would be corporate bonds, those would be a smattering of high yield bonds and a growing proportion of emerging market debt which yields in the 5 to 6 percent category," he said. "Are these bonds as safe as Treasurys? No, they are not triple-A types of investments but they're not overvalued based on quantitative easing procedures that we've seen over the past 12 months.

"So we've moved into Brazil and Mexico and moved money, yes, at the margin into Spain, which has a better balance sheet than the United States."

He said the Total Return fund has returned about 5 percent, whereas a Treasurys portfolio would yield about 2 percent.

by Jeff Cox CNBC.com March 10, 2011

Gross: Why Pimco Dumped Treasurys From Biggest Fund - CNBC

Gross: Why Pimco Dumped Treasurys From Biggest Fund - CNBC

The world's largest bond fund has moved out almost entirely from US debt and into that of emerging markets and corporations, Pimco's Bill Gross told CNBC.

Getty Images

Speaking a day after news broke that Pacific Investment Management Company had dumped its Treasurys holdings from its $236.9 billion Total Return fund, the Newport Beach, Calif.-based firm's managing director said it would return once yields grew more attractive.

"It's not a question of dissing the United States or questioning the credit of the United States, but simply a maturity reflection," Gross said. Treasurys are "mispriced relative to the inflationary environment and the growth we see ahead and there are better alternatives in order to capture yield."

Gross primarily based his evaluation on the reduction in yields caused by the Federal Reserve's buying of close to $2 trillion in Treasurys, with more slated before the second leg of the program—often called QE 2—comes to an end.

"When a trillion and a half dollars worth of annualized purchasing power disappears I simply question as to who will buy them and at what yield," he said. "We're suggesting at these yields it might be problematic."

Instead, the firm has moved its money to other debt until the rate structure changes.

"Those would be corporate bonds, those would be a smattering of high yield bonds and a growing proportion of emerging market debt which yields in the 5 to 6 percent category," he said. "Are these bonds as safe as Treasurys? No, they are not triple-A types of investments but they're not overvalued based on quantitative easing procedures that we've seen over the past 12 months.

"So we've moved into Brazil and Mexico and moved money, yes, at the margin into Spain, which has a better balance sheet than the United States."

He said the Total Return fund has returned about 5 percent, whereas a Treasurys portfolio would yield about 2 percent.

by Jeff Cox CNBC.com March 10, 2011

Gross: Why Pimco Dumped Treasurys From Biggest Fund - CNBC

Gross: Why Pimco Dumped Treasurys From Biggest Fund - CNBC

The world's largest bond fund has moved out almost entirely from US debt and into that of emerging markets and corporations, Pimco's Bill Gross told CNBC.

Getty Images

Speaking a day after news broke that Pacific Investment Management Company had dumped its Treasurys holdings from its $236.9 billion Total Return fund, the Newport Beach, Calif.-based firm's managing director said it would return once yields grew more attractive.

"It's not a question of dissing the United States or questioning the credit of the United States, but simply a maturity reflection," Gross said. Treasurys are "mispriced relative to the inflationary environment and the growth we see ahead and there are better alternatives in order to capture yield."

Gross primarily based his evaluation on the reduction in yields caused by the Federal Reserve's buying of close to $2 trillion in Treasurys, with more slated before the second leg of the program—often called QE 2—comes to an end.

"When a trillion and a half dollars worth of annualized purchasing power disappears I simply question as to who will buy them and at what yield," he said. "We're suggesting at these yields it might be problematic."

Instead, the firm has moved its money to other debt until the rate structure changes.

"Those would be corporate bonds, those would be a smattering of high yield bonds and a growing proportion of emerging market debt which yields in the 5 to 6 percent category," he said. "Are these bonds as safe as Treasurys? No, they are not triple-A types of investments but they're not overvalued based on quantitative easing procedures that we've seen over the past 12 months.

"So we've moved into Brazil and Mexico and moved money, yes, at the margin into Spain, which has a better balance sheet than the United States."

He said the Total Return fund has returned about 5 percent, whereas a Treasurys portfolio would yield about 2 percent.

by Jeff Cox CNBC.com March 10, 2011

Gross: Why Pimco Dumped Treasurys From Biggest Fund - CNBC

Gross: Why Pimco Dumped Treasurys From Biggest Fund - CNBC

The world's largest bond fund has moved out almost entirely from US debt and into that of emerging markets and corporations, Pimco's Bill Gross told CNBC.

Getty Images

Speaking a day after news broke that Pacific Investment Management Company had dumped its Treasurys holdings from its $236.9 billion Total Return fund, the Newport Beach, Calif.-based firm's managing director said it would return once yields grew more attractive.

"It's not a question of dissing the United States or questioning the credit of the United States, but simply a maturity reflection," Gross said. Treasurys are "mispriced relative to the inflationary environment and the growth we see ahead and there are better alternatives in order to capture yield."

Gross primarily based his evaluation on the reduction in yields caused by the Federal Reserve's buying of close to $2 trillion in Treasurys, with more slated before the second leg of the program—often called QE 2—comes to an end.

"When a trillion and a half dollars worth of annualized purchasing power disappears I simply question as to who will buy them and at what yield," he said. "We're suggesting at these yields it might be problematic."

Instead, the firm has moved its money to other debt until the rate structure changes.

"Those would be corporate bonds, those would be a smattering of high yield bonds and a growing proportion of emerging market debt which yields in the 5 to 6 percent category," he said. "Are these bonds as safe as Treasurys? No, they are not triple-A types of investments but they're not overvalued based on quantitative easing procedures that we've seen over the past 12 months.

"So we've moved into Brazil and Mexico and moved money, yes, at the margin into Spain, which has a better balance sheet than the United States."

He said the Total Return fund has returned about 5 percent, whereas a Treasurys portfolio would yield about 2 percent.

by Jeff Cox CNBC.com March 10, 2011

Gross: Why Pimco Dumped Treasurys From Biggest Fund - CNBC